Yes Equicare capital,thats Argyle.....Regarding Revcare bankruptcy. From Revcare Inc · PRER14C · On 8/11/05
Reasons for and Purposes of the Reverse Stock Split
The primary purpose of the Reverse Stock Split is to reduce the number of record holders of our Common Stock to fewer than 300 so that we can terminate the registration of our Common Stock under Section 12(g) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). The Reverse Stock Split is expected to result in the elimination of the expenses related to our disclosure and reporting requirements under the Exchange Act and to decrease the administrative expense we incur in servicing a large number of record stockholders who own relatively small numbers of our shares.
The other purpose of the Reverse Stock Split is to prepare the Company for an investment that is conditioned upon the de-registration of the Company under Section 12(g) of the Exchange Act. In the LOI, Lighthouse has indicated an interest in investing $4,500,000 of new capital in the Company in exchange for 70% of the newly issued and outstanding Common Stock on a post-Reverse Stock Split basis. Lighthouse is likely to make this investment through an entity controlled by it, Equicare Capital, LLC, a Delaware limited liability company. We are indebted to an affiliate of Lighthouse under a note of $250,000 made on February 9, 2004, with a payoff balance of $272,173 as of March 31, 2005. Robert Tam, a principal of Lighthouse, and other principals of Lighthouse are also principals in an entity that provides outsourcing and call center services to the Company. The Company has no relationship with Equicare Capital. Before it will engage in an investment in us, Lighthouse has required that the Company complete a going-private transaction, so that Lighthouse can purchase an equity interest directly from the Company rather than completing a public tender offer, the results of which would be unpredictable because of its voluntary nature, and that would present an undue risk that it would not be completed because many holders of small numbers of shares may not make the effort to tender their shares. Further, since it believes that the costs of the Company's continued registration under the Exchange Act are substantial and outweigh the benefits of such registration to the Company, Lighthouse has required that the Company engage in a transaction that allows it to terminate the registration of its Common Stock under Section 12(g) of the Exchange Act prior to Lighthouse's proposed purchase of new shares of Common Stock.
FSP has indicated to the Company that it is unwilling to continue to fund our working capital needs on an indefinite basis, and that the Company needs to attract new equity capital. The Board believes that the proposed investment by Lighthouse is likely to be the only opportunity for the Company to continue operations, and thus is recommending the Reverse Stock Split at this time. The Board also believes that by going private now, we will save costs and reduce our working capital requirements, and that those savings will outweigh any benefits of remaining a public company.
The Board believes that any material benefit derived from continued registration under the Exchange Act is outweighed by the cost. We have been unable to provide increased value to our stockholders as a public company, and particularly as a result of the increased cost and tangible and intangible burdens associated with being a public company following the passage of the Sarbanes-Oxley
